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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
March 31, 1999
____________________________
Date of report (Date of earliest event reported)
ASSISTED LIVING CONCEPTS, INC.
(exact name of registrant as specified in its charter)
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<S> <C> <C>
NEVADA 1-13498 93-1148702
____________________ ____________________ ____________________
(State or other jurisdiction Commission File Number (I.R.S. Employer
of incorporation or Identification Number)
organization)
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11835 NE Glenn Widing Drive, Bldg E, Portland, OR 97220-9057
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(503) 252-6233
_________________________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
_________________________________________________________________
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
The press release dated March 31, 1999 of Assisted Living Concepts,
Inc. (the "Company"), filed as an exhibit to this Current Report on Form 8-K, is
incorporated herein by reference.
Twelve complaints have been filed against the Company and certain of
its officers and directors in the United States District Court for the District
of Oregon since February 2, 1999. The complaints, which the Company expects will
be consolidated into one action, purport to be brought as class actions on
behalf of purchasers of the Company's common stock (during the period from April
29, 1997 or July 28, 1997 through February 1, 1999) and of the Company's 6% and
5.625% convertible debentures (from the date of their initial issuance through
February 1, 1999). The complaints allege violations of Section 10(b) of the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), and Rule 10b-5
promulgated thereunder and violations of Section 20(a) of the 1934 Act. The
complaints seek unspecified losses allegedly incurred as a result of the decline
in the price of the Company's stock and debentures following the February 1,
1999 announcement of the Company's restatement of earnings for 1997 and for the
first three quarters of 1998 and of the termination of the Agreement and Plan of
Merger among the Company, American Retirement Corporation, and Pioneer Merger
Corporation. The Company is unable to predict the outcome of the foregoing
litigation and currently is unable to evaluate the likelihood of its success in
each case or the range of possible loss. However, if the foregoing actions were
determined adversely to the Company, such judgments could have a material
adverse effect on the Company's financial position, results of operations, cash
flow and liquidity.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) None.
(c) The following document is furnished as an Exhibit to this Current
Report on Form 8-K pursuant to Item 601 of Regulation S-K:
99. Press release dated March 31, 1999 of Assisted Living
Concepts, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASSISTED LIVING CONCEPTS, INC.
By: /s/ Sandra Campbell
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Name: Sandra Campbell
Title: Senior Vice President,
General Counsel and Secretary
Date: March 31, 1999
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT DESCRIPTION
99. Press release dated March 31, 1999 of Assisted Living Concepts,
Inc.
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Exhibit 99
Assisted Living Concepts, Inc.
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NEWS
Contact: Joseph W. McDonnell
Broadgate Consultants, Inc.
503-252-6233
For Immediate Release
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ASSISTED LIVING CONCEPTS TO DELAY EARNINGS REPORT
EXPECTS LOSS FOR 1998 AND FURTHER RESTATEMENTS
BOARD OF DIRECTORS ELECTS NEW CHAIRMAN
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PORTLAND, OREGON, March 31, 1999 Assisted Living Concepts, Inc. (AMEX: ALF),
one of the nation's leading providers of assisted living for older adults, today
announced that it will postpone the filing of its report on Form 10-K, scheduled
to be filed on March 31, 1999 and delay its report of its 1998 earnings.
The Company also announced that in connection with its year-end audit
and in preparation for a previously announced restatement of its financial
statements, additional items continue to be identified which will materially
increase the size of the restatement, and may affect periods prior to the second
quarter of 1997, including the Company's results for the year ended December 31,
1996. The Company is in the process of determining the scope and magnitude of
the restatement.
As a result of the restatement and other factors, the Company expects to
report a net loss in excess of $15-20 million for the year ended December
31,1998. The Company also expects to record a material loss in the fourth
quarter of 1998 due to an increase in net interest and general and
administrative expenses resulting from a reduction in capitalized interest and
capitalized payroll associated with a lower level of development activity during
the period, a charge of approximately $1.2 million relating to a terminated
merger, write-offs of approximately $2.1 million relating to the abandonment of
certain development sites, the write-off of certain deferred financing costs and
other one-time charges. In addition, the fourth quarter was negatively impacted
by a reduction in occupancy at certain stabilized residences and by slower than
expected fill-up of recently opened residences, due primarily to the diversion
of management's time and attention in connection with the merger and also due to
regulatory issues in certain states. Several of these factors have continued to
impact operations during the first quarter of 1999 and,
-more-
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together with certain one-time charges, will have a material adverse effect on
the Company's results of operations for the first quarter.
As previously announced on February 1, 1999, the Company intends to restate
its financial statements for the year ended December 31,1997 and subsequent
quarterly periods to treat the reimbursement of losses from the operations of
certain start-up facilities by the Company's joint venture partner as loans,
rather than other income. The additional items identified as a result of the
year-end audit and in preparation for the restatement include, but may not be
limited to, an increase in net interest and general and administrative expenses
resulting from a reduction in previously capitalized amounts relating to the
Company's development activities and an increase in rent expense resulting from
the straight-lining of certain lease escalators. The restatement of the second
quarter of 1998 may also include an additional write-off of goodwill primarily
associated with the closing of the Company's home health care operations.
"We are working hard to address these issues so that we can put our
accounting problems behind us as quickly as possible," said Keren Brown Wilson,
President and Chief Executive Officer. "The Company has grown from 5 residences
at the end of 1994 to 177 residences today, including 70 that are debt free. We
have to keep in mind that we have the financial resources to operate our
business. And with our strengthened management team, we are enhancing our
infrastructure to move this company to the next stage of its development," said
Dr. Wilson. The Company continues to work closely with its independent auditors
to complete the audit for the fiscal year ended December 31, 1998 and the
restatement of financial statements.
The Company also announced today the election of Mr. Richard Ladd as
interim Chairman of the Board. The Company is in discussion with several highly
qualified candidates to be outside directors to the board, including a permanent
Chairman. Mr. Ladd replaces Mr. William McBride as Chairman. Mr. McBride has
advised the board that he will not stand for reelection to the board at the next
meeting of shareholders.
This press release and statements made by or on behalf of Assisted Living
Concepts relating hereto may be deemed to constitute forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements may be affected by risks
and uncertainties, including (i) those associated with the completion of the
Company's 1998 audit, the preparation of restated financial statements and the
scope and magnitude of the restatement, (ii) the costs associated with and
potential outcome of the Company's pending shareholder litigation and pending
and potential future regulatory actions, (iii) the impact of reduced occupancy
at certain stabilized residences and slower than expected fill-up of recently
opened residences and (iv) those more fully described in the Securities and
Exchange Commission reports filed by the Company on Form 10-K for the fiscal
year ended December 31, 1997 and Form 10-Q for the quarter ended September 30,
1998. In light of such risks and uncertainties, Assisted Living Concepts'
actual results could differ materially from such forward-looking statements.
Prior to the filing of periodic reports relating to the restatement, Assisted
Living Concepts does not undertake any obligation to publicly release any
revisions to forward-looking statements contained herein to reflect events and
circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events.
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